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Full text of "Centralization versus decentralization of information systems : a critical survey and an annotated bibliography"


Center for Information Systems Research 

Massachusetts Institute of Technology 

Alfred P, Sloan School of Management 

50 Memorial Drive 

Cambridge, Massachusetts, 02139 

617 253-1000 



CENTRALIZATION VERSUS DECENTRAJ.IZATION 

OF INFORMATION SYSTEMS: 

A CRITICAL SURVEY AND M ANNOTATED BIBLIOGRAPHY 

by 

Jacob Akoka 

November 1977 

CISR #36 
Sloan WP #1003-78 

updated annotated bibliography 
by Christine Bullen 
May 1978 



Introduction 

The literature dealing with the issues related to distributed manage- 
ment information systems is rapidly expanding. This literature may be 
classified in two categories: 

• the management-oriented literature which is concerned 
with the issue of centrali;;ation versus decentralization 
of information systems and the management of distributed 
processing; 
a the technically-oriented literature which deals with issues 
such as optimizing distributed networks and currency con- 
trol in computer networks. 

This survey deals only with the first aspect of distributed systems. 

In the first part of this paper, a critical study of the state of 
the art in distributed management information systems is provided. In 
the second part, an annotated bibliography related to the issue of cen- 
tralization versus decentralization of information systems is presented. 
This bibliography updates the one published by the Center for Information 
Systems Research (CISR) (1976) (1) . 



(1) Rockarc, J.I', and Leventer, J.S., "Centralization versus Decentraliza- 
tion of Information Systems: An Annotated Bibliography, CISR Report 22 , 
April 1976 



The author is indebted to Professor P.P.S. Chen for his help. 



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I. CENTRALIZATION VERSUS DECE^^'RAL_IZATION OF INFORMA.TION SYSTEMS: 
A CRITICAL SURVEY 



The issue of centralization versus decentralization of computer re- 
sources is not a new one; it has been widely discussed and hotly debated for 
at least two decades now. The interest in this issue was originally motivated by 
the feeling that the computer, a costly expense in terr.s of investment and operat- 
ing budget, should be used to the fullest possible potential. Interest also grew 
because it was felt that within a corporation, a large measure of political 
power rested with whomever controlled the data processing facility. Lately 
advances in network technology and the advent of efficient low cost mini and 
micro computers has initiated the era of distributed data processing and in 
effect thrown new fuel into the centralization/ decentralization fire. 

Of the voluminous literature published on this subject, we first concentrate 
on key articles relating to one aspect of the problem: the centralization/de- 
centralization decision . Management, faced with decisions regarding proper 
long range directions toward optimal configurations of hardware, software, and 
personnel finds little by way of guidelines to follow. There seems then to be 
a real need for a rigorous decision model to provide management with an 
approach to solving this dilemma. 

Ernest Dale (2) states: "the proper balance between centralization and 
decentralization often is decided by necessity, intuition, and luck because of 
the immense variety of possible human behavior and vast multiplicity of 
minute, undiscoverable causes and effects that cannot be encompassed in 



(2) Dale, E. '"Centralization versus Decentralization," Advanced Management , 
June 1955. 



- 3 - 



any principal or standard of evaluation." In addition, current solutions seem 
highly dependent on the characteristics, philosophies, and objectives of 
the particular organization for which the decision is to be inade. Accord- 
ing to George Glaser (3) , "the organizational approach to data p'-ocessing 
should be consistent with the overall* organizational approach of the com- 
pany in which it functions." The problem is not only of major importance 
but of substantial complexity also. 

Having surveyed many articles available in the literature it is clear 
that, with few exceptions, most articles fit one of the following categories: 

• a general discussion of advantages and disadvantages of 
various configurations as viewed from a decision-making 
perspective; 

• the establishment of decision criteria from specific cor- 
porate functions; 

• a proposed decision model by which management can m.ake 

qualitative decisions about organizational directions 
based on specific data processing applications; 
« a discussion of distributed systems as being a new and 

attractive approach to the centralization/decentraliza- 
tion decision. 

The first groun of articles is very general and focusses on discussions 
of advantages and disadvantages of various ccif igurations. From a func- 
tional point of view, cost applications could be accomplished by either 



(3) Glaser, G., "The Centralization versus Decericralization Issue: Ar^^'inants , 
Alternatives and Guidelines," D atabase , Fall/Winter 1970 



- A - 



centralized or decentralized approaches. However, as G.A. Champ ine (4) 
states, "each of the two approaches has advantages and disadvantages. 
In general the advantages of a centralized approach are the disadvantages 
of a distributed approach and vice versa." For example, some of the ad- 
vantages and disadvantages he lists are: 

"Centralized advantages/distributed disadvantages" 
o Operations economy 

• Hardware economy of scale 

• Unified control 

• Easy interfile communications 

• Easy update/retrieval 

• Compatibility 

"Distributed advantages/centralized disadvantages" 

• Communication failsoft capability 

• Central site failsoft capability 

• Lower communication data rate and costs 

• Configuration flexibility 

• High speed performance (fast response and high 
transaction rate) 

• Modular upgrade 

Dozens of authors have written similar articles citing specific adva-" j,-s 
and disadvantages. Some of these articles ar^i described below: 

Rejmolds (5), argues that three economic considerations have to 
be taken into account: personnel to operate the hardware, data processing 



(4) Champine, G.A., "Six Appraoches to Distributed Databases," Datamation , 

May 1977 

(5) Reynolds, C.H., "Issues in Centralization," Datamation, March 1977 



-5- 
applications progranming efforts and the conputing. All three considerations 
can lead to some economic saving when implemented in a centralized way. 
Reynolds uses his own organization, Hughes Aircraft Corporation, as an 
illustration of his argument. 

Kieder (6) argues that two considerations are critical in arriving 
at the most effective type of organization for a particular corporation - 
i.e. corporate structure itself (irrespective of data processing tasks 
performed) and size and location of tKe corporation. 

Wofsey's (7) article is mainly a discussion of the respective ad- 
vantages and disadvantages of both the centralized and decentralized 
approaches to systems design. 

Finally, Burnet and Nolan (8) argue that the technology has now 
matured to the stage where the cost of using a mini for certain data 
processing jobs compares favorably with using a portion of tlie capacity 
of a large machine. 

In some articles this approach takes a more general form. Louis 
Fried (9) exemplifies this in his article when he states, "As part of 
the continuing discussion that is almost as old as the computer industry, 
there have, been as many reasons advanced for decentralization as for 
centralization. However, in contrast to the arguments for centralization, 
which center around efficiency, the arguments for decentralization center 
around effectiveness." It is my contention that this first group of articles 
±s too geieral and diverse from which to draw -any meaningful generalizations 



(6) Kieder, S.P., "Once again Centralize or Decentralize," Infosystems , 

December 1976 

(7) Wofsey, M.M. , "Centralization versus Decentralization," Manage-ent 

of EDP Syste~.3 , 1973 

(8) Burr.et, G.J., and Nolan, R.L., "At Last Major Roles for Minicomputers," 

Harvard Business Review , May-June 19/5 

(9) Fried, L., "Centralization: To Be or Not To Be," Infosystems . January 

1976 



- 6 - 



in terms of deoleions regarding optn.^1 solution. As Rockart -• 
et. al. (10) state, "The articles on the advantages and disadvantages 
of centralization and/or decentralization abound in the literature. 
Since different authors have different assumptions and approach the prob- 
lem somewhat differently, their arguments are not strictly comparable." 

The second group of articles approaches the discussion of centralization 
versus decentralization in terms of corporate functions. These articles 
are far more useful in that they propose specific ways of looking at the 
decision. Norton (11) reiterates this point by stating, "Generaliza- 
tion is meaningless when applied as a generality to information systems. 
Indeed, the concept of centralization must be approached in terms of 
specific functions which make up operations and management of an organiza- 
-iion's information. system." Accordingly. Norton groups information systems 

related activities into three categories: systems development, systems 
operations, and systems management. Each of these categories can be 
defined functionally as follows: 

Systems Development : This includes system design, the development 
of detailed specifications and programs, implementation plans, and maintenance 
plans. 

Systems Operations ; This includes the editing and control of input 
and output, updating data files, processing, and the reporting of results. 

Systems Management ; This includes planning long range directions 
and projects, and maintaining control over the entire facility. 



(10) Rockart, J.F., and Leventer, J.S., "Centralization versus Decentral- 

ization of Information Systems: A Critical Survey of Current 
Literature," CISR Retport 23 , April 1976 

(11) Norton, D.?., "Inromaticn Syster.s Centralization: The Issues," 

Harvard Business Review, 9-172-286, 1972 



-7- 



He then goes on to more rigorously define these activities and observes 
that the administrative planning and control tasks undoubtedly have more 
influence on the effectiveness and efficiency of an information system 
than other variables. Carl H. Reynolds (12) takes a similar approach 
to that of Norton's. Ke divides data processing facilities into three com- 
ponents: "the computing hardware," "personnel required to operate the hard- 
ware," and "data processing applications programming efforts." These 
categories less rigorously define the activities of a data processing facility 
and are therefore less useful. 

This approach, by which the problem is divided into smaller pieces, 
leads to the third category which consists of only one article. Rockart 
et. al. (13) follow Norton's reasoning that activities performed by information 
systems are three distinct processes: systems operation, systems management, 
and systems development. Since each is an independent process, the decision 
to centralize or decentralize can be made independently for each one. The 
authors further segment the problem by looking at the decision in light of the 
applications being performed. Their proposal is then basically that decisions 
to centralize or decentralize can be made separately for each of Norton's 
processes (system development, system operations, and system management) 
and each group of closely related applications of being performed. Rockart's 
model does offer general guidelines for management to follow. It takes a 
step in the right direction in that the model proposes concrete procedures 
to follow. Although Rockart relies on mainly qualitative methods of 
evaluation, his division of decisions with regard to applications opens 
the door to quantitative evaluation methods. . 



(12) Reynolds, C.H., op. cit. 



(13) Rockart, J.F., Leventer, J.S., and Sullen, C.V., "Centralization 
versus Decentralization of Information Systems: A Primary Model 
for Decision Yiaking," CISR Report , 19 76. 



- 8 - 



The last group of articles discusses distributed data processing as 
a new and promising trend in data processing configuration, which could elimi- 
nate the whole centralization/decentralization problem, John Lusa (14) states, 
"Some people are still arguing the comparative merits of centralizing or 
decentralizing infosystems activities. While the discussion goes on at a 
somewhat academic level, a relatively new phrase, if not necessarily repre- 
senting a new concept, may keep the discussion at that level. Distributed 
processing has blossomed into major prominence as a technique for increas- 
ing the efficiency of a data processing operation to the benefit of the 
users." This new trend brought on by network technology and the advent 
of low-cost mini and micro computers has indeed created an appealing al- 
ternative for certain situations. Other authors such as John W. Luke (15), 
Richard G. Canning (16) and Tien Chi Chen (17) , to name a few, take similar 
positions in favor of distributed data processing. Distributed processing 



(14) Lusa, J. M. , "Distributed Computing Alive and Well", Infosystems , 

November 1976. 

(15) Luke, J. W., "Unravelling the Confusion of Distributed DP", Info- 

systems , December 1976. 

(16) Canning, R. G. , "Is Your Future Distributed Systems?", EDP Analyzer , 

Vol. 11, No. 8, August 1973. 

(17) Chen, C. T., "Distributed Intelligence for User Oriented Compull..o", 

AFIFS , Vol. 41, Fall 1972. 



_ Q _ 



may well be the computing phenomenon of the 1980's, and it may well be 
the solution to some problems. However, aini computers and network 
technology will not solve all data processing problems. And the funda- 
mental issue of which data and which coEputer processing should take 
place at the outboard end of the systea (decentralized) and which in- 
board (centralized) still remains. 

In conclusion 1 would like to offer Robert L. Patrick's (18) obser- 
vation, "A mini is a good solution, sometimes. Decentralization — or 
distributed processing, or distributed computing, or whatever — is a 
good solution sometimes, but they are only good solutions to some problems, 
As in most things we do, the important work is in deciding whether the 
solutions we like fit the problems we have." 

In surveying the literature, little was found in the way of hard 
conclusions. The centralization/decentralization decision process is 
still very subjective at best. But the factors involved in making cen- 
tralization/decentralization decisions are now coming more clearly into 
focus. 



(18) Patrick, R.L., "Centralizing Hardware and Dispersing Responsibility", 

Datar.atlon , May 1976. 



- 10 - 



II. CENTRALIZATION VERSUS DECENTRALIZATION OF INFORMATION SYSTEMS: 
AN ANNOTATED BIBLIOGRAPHY 



Becker, 
Hal B. 



"Preparing for Distributed Data Processing," 
DataComm User , January 1977, pp. 22-24 

This article focuses on new network planning phil- 
osophy. It begins by defining the inforcation net- 
work environment, stating the user's requirements, 
and then using a design sequence to identify speci- 
fic hardware and software products. It's a particu- 
larly useful technique for distributed processing 
networks. 

The author divides user requirements into three 
basic categories: 

1. information processing, or manipulation 
of Information in a way that produces 
the desired result; 

2. netv7ork processing, or the movement of 
information between the various network 
nodes; 

3. database or storage of information within 
the network in forms convenient to network 
users. 



Becker, 
Hal, B. 



The author claims that the users requirements should 
be essentially independent of specific hardware, soft- 
ware and applications. These functional requirements 
are defined in terms of: topology, anticipated volume 
of information flow, existing information processing 
facilities, response time, availability, and security. 

Using the requirement statement as input, the analysis 
and design sequence employs an iterative, interacti"" 
series of steps to derive a workable, optimum, econom- 
ically justifiable network configuration. 

"Six Steps to Network Analysis and Design," DataComm 
User . March 1977, pp. 30-31 

In this article, the author arguos that in the str-Jt- 
tured approach to network inpiemsntation, tj.e analysis 
£nd design sequence involves an iterative, interactive 
series of steps. It is iterative in that some or all 
of the steps may be repeated and it is interactive in 



- 11 - 



Blair, 
James, F. 



Champlne, 
G.A. 



Donaldson, 
Hamish, 



that it consists of a combination of automated algorithms 
and manually derived design and decision making processes. 
The sequence consists of six basic steps: the require- 
ment statement, physical and logical design, performance 
prediction, installation/operation, performance validation 
and evolution. 

"Distributed Inforiration Systems," Telecommunications , 
January 1974, pp. 39-40 

Distributed ii'.ronnatlon systems are defined here as a 
hierarchy of processors linked together, each of which 
may have human as well as database interfaces. A table 
defines the typical characteristics of six types of dis- 
tributed information systems, however, the distinction 
among the types may blur in actual use. Two examples of 
DIS are presented: a communication network for the Texas 
Department of Public Safety, and one for Bancsystems Association 
of Cleveland, a credit authorization organization. By 
utilizing the concept of a hierarchy of processors for 
communications efficiency, many corporations and institu- 
tions are achieving cost effective systens. This will 
have an overwhelming impact upon the growing data com- 
munications industry. 

"Six Approaches to Distributed Data Base Systems," 
Datamation , May 1977 

In this paper, it is argued that distributed databases 
offer a solution to the very real problems of geograph- 
ically distributed organizations which need to preserve 
a unified information sharing and processing system. 
Computer industry trends, such as falling costs of pro- 
cessing and storage compared to more stable coirjiiunica- 
tion costs, are responsible for the increasing appeal of 
distributed database systems. The paper describes the 
two basic approaches to distributed databases which are 
to replicate the database at each node, which will 
work best where file sizes are small and commun- 
ication costs high; or to partition- the database, which 
works best when most transactions are to "local" large 
files. It is shown that when most transactions are not 
to local files and file size is large, centralization of 
some form may still be the economically justified answer. 

"A Case for Distributed Processing," Data Exchange , July- 
August ,1975, pp. 43-45 



It is argued here that decentralized management needs 
decentralized comp'^ting, because: a) different 



- 12 - 



have different needs, b) it requries a very strong 
manager to impose the sane system en two different 
divisions, c) a changing business strategy requires 
flexibility. The author suggest one should develop 
common systems only where there is a very clear common 
need. 



Edited 



Regarding management, however, what seems to be re- 
quired is, according to the author, a sort of dual 
management: business management from the user manage- 
ment and technical supervision from management services 
(i.e. DP). It is claimed that in small to medium sized 
companies central control is essential. In larger 
organizations more flexibility is possible and the 
advantages of centralized control must be weighed 
against potential dangers of over-bureaucratic inter- 
ference. In summary, central control of systems 
development is usually desirable. 

"Distributed Data Systems," EDP Analyzer , Vol. 14, 
June 1976, pp. 1-13 



In this paper, it is claimed that one of the problems 
with distributed systems is deciding what functions 
should be distributed, where they should be distributed, 
how to control the operation of the hierarchy of func- 
tions, and how to insure database integrity. Some mo- 
tivations for distributed systems are: 1) to enhance 
reliability, 2) to take advantage of falling processing 
costs, 3) to handle growing transaction volume, 4) to 
perform input validation on the spot. In this paper, 
it is argued that there are three main ways of partition- 
ing systems: 

1. Partitioning Of An Application System . Here the 
system designer must search for the natural clus- 
tering of activities. 

2. Partitioning, By Functional Area . Each department 
would probably have its Cati minicomputer system, 
and the several departmental systems might be tied 
together in some sort of network system. 



Edited 



3. Partitioning Of The Data Processing Function . Sup- 
porting remote data entry, handling data communica- 
tions functions, or handling the database management. 

"Distributed Systems and the End User," EDP Analyzer , 
Vol. 14, No. 10, October 1976 



The article focuses on the numerous reasons which account 
for the growing interest in distributed systems. For 



- 13 - 



Edited 



example, one reason is the reduction in overall op- 
erating costs that these systens promise. Another 
reason is that they give each organizational unit the 
resources to do its own data processing - to "control 
its own destiny" in the words of one executive. At 
the same time distributed systems may well bring radi- 
cal change in the whole data processing environment, 
as we know it today . Almost all aspects of the data 
processing function - systems development, programming, 
data entry, and computer operations - may shift in the 
direction of the end user. This article includes the 
experiences of some organizations where such a shift 
has already started. 

"Distributed Computing and the Mini-Computer," 
Canadian Data Systems , July 1974, pp. 38-39 



This article claims that distributed computing means 
putting the computer power where the job is. The 
author asserts that by using the right small computer 
at the right place, there are increases of control and 
a reduction of communications costs. It is argued 
that, only summary data needs to be communicated to other 
elements in an overall system. This article further 
lists areas around a plant where computer power should 
be distributed. 



Edited 



"Distributed Minis Score Over One Large System at 
Equitable," DataComm User , March 1975, pp. 51-52 



In this paper, it is reported that the Equitable Life 
Insurance Society has implemented a series of distribut- 
ed mini computer systems in aspects of its claims pro- 
cessing, and statistical analysis. It is argued that 
the mini's shorter implementation period, low implemen- 
tation cost compared to large batch/on line computer 
systems, lower operating costs, and lower site prepar- 
ation costs are factors which lead to the decision. 
Equitable uses the mini's for processing in real-time 
mode for the following applications: group claim payment r.ys- 

tem; calculations for group insurance compensations for 
agents; administration of medicare for the states of 
Idaho, New Mexico, Tennessee, and W^/oming; integrnted 
group insurance system, to miintain a unified dat^:! base 
with exhaustive premium and claim information for all 
policies; and a satellite programming office in Cresskill, 
New Jersey. 



- 14 - 



Edited : "Talking About Distributed Processing," Data Systems , 

February 1976, pp. 8-23 

This article presents a number of different views on 
both the principle and practice of distributed pro- 
cessing. At the present time, distributed processing 
systems are evolving rather than being planned. It 
is argued that dispersed unconnected data processing 
systems are turned into distributed systems by the in- 
stallation of ccmmunication links. Such systems have 
evolved throui^L the need to retain vital data 
locally, and to improve the operation and control of. 
remote systems. Problems connected with the concept 
are largely management oriented. The editor stresses 
the fact that the planning phase is vitally important 
and must be exhaustive and informed. Management must 
also solve the problem of security and lack of uniform- 
ity of accounting techniques. 

Edited : "Talking About Networks," D ata Systems , March 1977, 

pp. 7-9 

Thi§ article indicates that there are now more than 
twelve major communication networks, private and 
commercial in the world. It is claimed that the 
implementation of a network raises many problems be- 
yond those of its design. The article describes below 
some of these problems: 

1. Standardization And S:.E:3le Interfaces To All Kinds 
Of Hardware And To Other :.'etvorks . The Interna- 
tional Standards Organization has been largely con- 
cerned with this and was responsible for high level 
data link control. The issue has been complicated 
by IBM's introduction of systems network archi- 
tecture. 

2. Tariffs . Agreement must be reached between coun- 
tries involved in networks which cross national 
boundaries. The difficulties' of privacy and data 
security increase costs. 

3. Demands Of Individual Government Authorities, 



Particularly In The Case Of Security And P-^ivacy 
On International Networks. The author describes 
how some networks handle some of these problems. 



- 15 - 



Edited : "Distributed Processing Is In, V;hatever It Is," Datamatio n, 

Vol. 22, December 1976, pp. 102-111 

The article recognizes the fact that distributed proces- 
sing appears to be flourishing in Europe. Most plans will 
be implemented In the next 3-4 years. Most are planning 
to put part of their databases and processing capability 
into intelligent terminal systems, microconputers, and 
small business systems located at user departments 
or remote factory floors, distribution centers, and sales 
offices. Reasons tended to center on better services 
to end users, followed by cost implications. 

It is claimed that the central site generally remains in 
ultimate control. Hardware selection and systems program- 
ming will be done by a central staff. Standardization is 
the reason for centralized control. Applications include 
order processing and inventor;/ or stock control, produc- 
tion control and planning, and local management and fin- 
ancial applications. Most remote processors will have a 
portion of the database and will be in daily communication 
with the host processor. 



Emery, : "Managerial and Economic Issues in Distributed 
James C. Computing," IFIP Proceedings . 1977, pp. 945-55. 

"Discusses technological developments which have„jnade 
it feasible to distribute processing functions, alter- 
native computing configurations, and the centralization 
versus decentralization issue. The advantages and 
hazards of distributed systems are also examined." 
[from Quarterly Bibliography of Computers and Data 
Processing , Vol.7, no. 4, January 1978.] 



Fledelman, ; "It's A Small World," Infosystems , Vol. 24, April 1977, 
Lawrence pp. 50-54 

In this article, the author argues that the distributed 
system using minicomputers is not the only means to meet 
the needs for multi-locaticn data processing; in fact, 
it Is in direct compt>.j.i.j.ci with large computer systems 
with on-line remote terminrls. However, as the price of 
minicomputers continues to drop, extensive business soft- 
ware enhancements are introduced, data communications 
facilities become more economical > «nd the data processing 
manager develops more knowledge of how to handle this sit- 
uation, we are seeing an ever growing trend toward dis- 
tributed crr-utin^. The ccta prtce^sins m-ir.a'.;er vill reed 
to determine how such equipment can best be utilized ana 
to identify system management implications. 



- 16 - 



Fried, 
Louis 



"Centralization: 
1976 



To Be or Not To Be," Infcsystems , January 



Glaser, 
George 



Hannan, 
James 
and 

Fried, 
Louis 



Hunter, 
John J. 



This article begins with the description of 
Citibank's data processing reorganization toward decen- 
tralization. It is claimed that change can be traumatic 
and the "average" corporation is advised to avoid it un- 
less it is well justified. Arguments are presented citing 
advantages and disadvantages on both sides of the central- 
ization/decentralization issue. The best structure^in 

the end, seems to result from careful analysis of the 
total corporate requirements of data 

processing. After the many considerations are weighed , 
the best reorganization method should be tailored to fit 
an individual corporate situation. 

"Distributed Data Processing: Promises and Pitfalls," 
Proceedings of the IDC Conference on Distributed Data 
Processing , April 1977 

George Glaser begins this article by refering to dis- 
tributed data processing as "offering the joys of 
computerdom long promised by the industry. As with any 

reorganization plan the costs are likely to be high, 
but he cites this as similar to the costs of any tech- 
nological advance. The author claims that the primary 
advantage of distributed processing is that it would im- 
prove the quality of service rendered by an enterprise, 
in that operating needs would be assessed more real- 
istically and on a more timely basis. This is not to 
say reorganization toward distributed processing is not 
without problems. The author asserts that a battery of 
issues like spending authorities, development priorities, 
quality control, and standards will certainly challenge 
even the most experienced managers' skills. 

"Should You Decentralize," Computer Decisions , Vol. 9, 
February 1977, pp. 40-42 

This article approaches the question of centralization 
versus decentralization from an advantages versus dis- 
advantages perspective. Several systems incorporating 
the best of both are discussed, and specific criteria 
is outlined for making the decision. 

"Distributing a Database," Computer Decisions , Vol. 8, 
June 1976, pp. 36-40 

The author reports that about a decade ago, there was a 
switch from remote processing to a new discipline of cen- 
tralized commuting. Some problems that came with cen- 
tralization were enormous databases, data inavailability 
due to line failures, concern for data security, :_-■- 
overloading of the central processor. One answer to these 
concerns proposed by D? strategists is distributed pro- 
cessing. The us er' s_ files are placed at or near the 



17 - 



Kelsch, 
August L. 



Kleder, 
Stephen P. 



La Vole, 
Paul 



points where the transactions occur. This way the user's 
data are always available, and there is no worry about 
data cocmunications failures. 

Possible ways of distributing a database to meet the de- 
mands of the three cost coinaonly used distributed pro- 
cessing networks - star, hierarchal and ring - are also 
also discussed. 

"Dispersed and Distributed Data Processing," Journal 
of Systems Manager.ent , Vol. 29, No. 3, March 1978, 
pp. 32-37. 

This article focussfes on an organizational design which 
"marries" distributed and centralized data processing 
In an attempt to "maximize the availability of the com- 
puter as a business service tool." The author allocates 
operational responsibility to the end user of a distrib- 
uted system and retains technical responsibilities in a 
centralized DP group. 

"Once Again: Centralize or Decentralize", Infosystems , 
December 1976. 

This article addresses the issue of centralization vs. 
decentralization of corporate data processing systems. 
The article cites two considerations as critical in 
arriving at the most effeccive type of organization 
for a particular corporation: 1) corporate structure 
itself Irrespective of data processing tasks performed; and 
2) size and location. The author finishes by citing 
several advantages are disadvantages for both systems. 

"Distributed Computing, Systematically", Computer De- 
cisions . Vol. 9, March 19 77, pp. 44-45. 

It Is argued that a system approach is mandatory In the 
field of distributed data entry and processing. The 
author claims that this new field promises important 
benefits both to the DP manager and to the user departments. 
The author argued that since distributed data entry 
and processing is a new technique, there are few stan- 
dards and even fewer general systems design principles. 
This article contains some basic questions 
which should help DP management avoid some of these 
pitfalls. 



Luke, 
John W, 



"Unravelling the Confusion of Distributed Data Process- 
ing", Infosystems , December 1976. 

Tlie author claims that there is considerable divergence 
of views on the definition of distributed processing. As a 
consequence, it rii-cS the question of vhcthir di - tribute i 
essing alre-cy with us cr st. — r. rev yazrs 'j-z -t. i.t^ lu;,. 



- 18 - 



. It is claimed that network services are already provid- 
ing distributed processing. Integration of an on- ■ 
site machine into a network enables utilization of 
all the systems resources while retaining control over 
the local installation. However, there are still soft- 
ware problems to be solved before the full potentialities 
of such integration can be realized. 

It is argued that commercial networks have a formidable 
arsenal of advantages which are offered to their customers. Re- 
liability is one of the most valuable features as well as 
hundreds of application packages. Thus the author claims 
networks offer the best of both centralized and decentral- 
ized worlds . 

Lusa, : "Distributed Computing: Alive and Well", Infosystems , 

John M. November 1976. 

This article suggest that distributed computing is 
blossoming into a technique of major importance for 
increasing the efficiency of data processing opera- 
tions. "Distributed Data Processing might be des- 
cribed as the marriage of minis and telecoms:unications", 
and will mature into the electronic office of the 
future. 

Patrick, : "Decentralizing Hardware and Dispersing Responsibility", 
Robert L. Datamatio n, May 19 76. 

This article states that at one time Grosch's law was more 
nearly correct. It may still be useful today when 
applied to the CPU cluster alone, but support costs, 
which are primarily personnel costs, rise more slowly 
than the costs of the computer configuration and there- 
fore continue the argument that bigger is cheaper. 



On the opposing side, the complexity of the entire sys- 
tem of hardware, software, and personnel, rises much 
more rapidly than computer power or costs. Wnen that 
complexity rises to a point where it taxes our abilities 
to manage, it argues strongly against centralization in- 
spite of any economies of scale. 

As a conclusion the author claims: "A mini is a good solu- 
tion, sometimes. Decentralization or distributed pro- 
cessing or distributed computing or whatever -- is a good 
solution sometimes, but they are only good solutions to 
some problems. As in most things we do, the important 
work is in deciding whether the solutions we like fit 
the problems we have." 



- 19 - 



Re>molds, 
Carl H. 



"Issues in Centralization", Datamation , March 1977. 

This article addresses Hughes Aircraft Company's de- 
cision to 'centralize their data processing functions. 
By doing so it v/as estimated that data processing 
costs could be cut by a factor of two. 

The article centers on three economic considerations 
fundamental to making any centralization/decentraliza- 
tion decision. 

First is the personnel to operate the hardware. Usually 
centralization offers some savings however as on-line 
processing comes into greater use, the operator ex- 
pense will be less an issue. Also the ease with which 
multiple tasks can be performed by operators at small- 
er decentralized installations tends to lessen this 
expense. 

The second issue to be considered is data processing appli- 
cations programming efforts. Here one should e>?pect savings 
from centralization only if there exists in a corpora- 
tion common programming applications. In corporations 
with varied application of data processing facilities 
decentralization can be more economical. 

The last issue to be considered is the computing hardware. 
Economy of scale does not seem to be as important an argu- 
ment for centralizaton as it used to be due to the advent 
of inexpensive mini-computers: Tracking down system 
failures in smaller decentralized installations is easier 
and can in fact mean additional savings in data proces- 
sing costs. 



Ritchie, 
Robert 0. 



It appears that the centallzation resulted in major 
cost savings for Hughes Aircraft Company in data 
processing functions. Some effectiveness might have 
been sacrificed but in terms of the individual data 
processing needs of the company, centralization was 
detejcmined to be the better organizational structure. 

"Intelligent Terminals and Distributed Processing", 
Computer Decisions , February 1975, pp. 36-42. 

In this paper it is argued that intelligent terminals 
and distributed processii»g provide processing capa- 
bilities to remote locations, freeing the large cen- 
tral computer of menial processing tasks. Communica- 
tion costs decrease, fewer I/O's are needed to the data 
base or mainframe, and the user has computational power 
unique to his requirements as well as a much more re- 
liable system and independence from error-prone communi- 
cations f'ciiitias. The Euthor gives su~:;e3tion? to 
help select hardware and software for such a system. 



- 20 - 



Rockart, 
John F. 
and 
Leventer, 
Joav S. 
and 
Bullen, 

Christine 



"Centralization versus Decentralization of Infornation 
Systems: A Preliminary Model for Decision-Making", 
CISR Report, Sloan School of Management, MIT, Cambridge, 
Massachusetts (forthcoming). 

Of the many organizational decisions facing management 
today one of the most difficult must certainly be wtiether 
to centralize or decentralize their data processing 
structure. In this area v/here guidelines are general 
at best, Rockart proposes a model which if used proper- 
ly assesses each pertinent factor involved in a corpora- 
tion and logr.cally determines which functions within the 
data processiiig facility should be done locally and 
which functions should best be accomplished centrally. 
Thus the model is based on Norton's observation that 
the activities performed by information systems are in 
fact three distinct processes: systems development, 
systems operation, and systems management. Since each 
of these is an independent process the decision to cen- 
tralize or decentralize can be made independently for 
each process. Further segmentation with respect to 
logical application groups can be made for both systems 
development and systems operations, however systems 
management is viewed as being a decision made for the 
corporation -as a whole. 



Rockart' s decision model though entirely qualitative 
offers precise guidelines for m.anagement to follow. 
It is the most advanced model in this area. 



Severino, 
Elizabeth F. 



"Databases and Distributed Processing", Computer Decisions , 
Vol. 9, March 1977, pp. 40-42. 

It is argued here that the concepts of distributed pro- 
cessing are maturing. This growth should play a role in 
■the decision to install a distributed processing sys- 
tem. There are two kinds of processing power, horizon- 
tal and hierarchical. In horizontal distribution, all de- 
vices co-operate at the same logical level to perform 
a set of tasks. Rule and control are democratic. The 
processes exchange jobs or transactions so that the total 
workload is distributed. In a hierarchical scheme of 
distribution, the devices are interconnected to form a 
functional hierarchy. The sharing of tasks and other 
functional relationships are structured and all devices are 
controlled by a primary network computer. There are also hybr: 
forms of networks that use both approaches and even net- 
works that are dynamically reconf igurable. 



- 21 - 



Statland, 
Norman 
and 

Winski, 
Donald 



"Distributed Information Systems: Their Effect on Your 
Company," P rice Waterhouse Review , Vol.23, No. 1, 1978, 
pp. 54-63. 

This article examines the organizational and management 
implications of the distributed processing environrr.ent . 
The authors point out that too often the general manager 
has viewed the MIS department as an overhead cost which 
he/she wants to minimize, rather than seeing it as an in- 
vestment to be maximized. The authors propose a distrib- 
uted processing scenario which plans systems development 
and operations with the user and maintains a centralized 
MIS department for promulgating standards and procedures. 



Woods, 
Larry D. 



"Distributed Processing in Manufacturing," Datamation , 
Vol. 23, October 1977, pp. 60-63. 

"Addresses the potential for the loss of control and 
the problems of maintaining corporate data bases in 
light of the proliferation of minicomputers in a large 
manufacturing company. Specifically, the environ,menr. 
of the John Deere Company and its approach to solving 
those problems are discussed." [from Quarterly Biblio- 
graphy of Computers and Data Processing , Vol.7, no. 4, 
January 19 73.] 



- 22 - 



LIST OF THE ARTICLES SURVEYED 



(1) Becker, Hal B., "Preparing for Distributed Data Processing", Data 

Comm User , January 1977, pp. 22-24. 

(2) Becker, Hal B., "Six Steps to Network Analysis and Design", Data 

Comm User , March 1977, pp. 30-31. 

(3) Blair, James F. , "Distributed Information Systems", Telecoinaunications , 

January 1974, pp. 39-40. 

(4) Champine, G. A., "Six Approaches to Distributed Data Base Systems", 

Datamation , May 19 77. 

(5) Donaldson, Hamlsh, "A Case for Distributed Processing", Data Exchange , 

July-August 1975, pp. 43-45. 

(6) Edited, "Distributed Data Systems", EDP Analyzer , Vol. 14, June 1976, 

pp. 1-13. 

(7) Edited, "Distributed Systems and the End User", EDP Analyzer , Vol. 14, 

No. 10, October 1976. 

(8) Edited, "Distributed Computing and the Mini Computer", Canadian Data- 

systems , July 19 74, pp. 38-39. 

(9) Edited, "Distributed Minis Score Over One Large System at Equitable", 

Data Comm User , March 1975, pp. 51-52. 

(10) Edited, "Talking about Distributed Processing", Data Systems , February 

1976, pp. 8-23. 

(11) Edited, "Talking About Networks", Data Systems , March 1977, pp. 7-9. 

(12) Edited, "Distributed Processing Is In, Whatever It Is", Datamation , 

Vol. 22, December 1976, pp. 102-111. 

(13) Emery, James C, "Managerial and Economic Issues in Distributed 

Computing," IFIP Proceedings , i""'-' pp. 945-55. 

(14) Feidelman, Lawrence, "Its a Small World", Infosystems , Vol. 24, 

April 1977, pp. 50-54. 

(15) Fried, Louis, "Centralization: To Be or Not To Be", Infosystems , 

January 19 76. 

(16) Giassr, George, "Distributed Data Prccass'.-.s: Prc-i^es 2r.d Pit- 

falls", Proceedings of the IDC Conference on Distributed 
Processing, January 197 7. 



- 23 - 



(17) Hannan, Jaiies and Fried, Louis, "Should You Decentralize," Computer 

Decis ions, Vol, 9, February 19 77, pp. ^0-42. 

(18) Hunter, John J., "Distributing a Database", Computer Decisions , 

Vol. 8, June 1976, pp. 36-40. 

(19) Kelsch, August L., 'Dispersed and Distributed Data Processing," J ournal 

of Systems Management , Vol. 29, No. 3, March 1978, pp. 32-37. 

(20) Kieder, Stephen P., "Once Again: Centralize or Decentralize", Info- 

systems , December 1976. 

(21) La Voie, Paul, "Distributed Computing, Systematically", Computer 

Decisions , Vol. 9, March 1977, pp. 44-45. 

(22) Luke, John W. , "Unravelling the Confusion of Distributed Data 

Processing", Infosystems , December 1976. 

(23) Lusa, John M. , "Distributed Computing: Alive and Well", Infosystems , 

November 1976. 

(24) Patrick, Robert L., "Decentralizing Hardware and Dispersing Responsi- 

bility", Datamation , May 1976. 

(25) Reynolds, Carl H., "Issues in Centralization" , Datamation , March 1977. 

(26) Ritchie, Robert 0., "Intelligent Terminals and Distributed Process- 

ing", Computer Decisions , February 1975, pp. 36-42. 

(27) Rockart, John F., Leventer, Joav S., and Bullen, Christine V,, "Cen- 

tralization versus Decentralization of Information Systems: 
A Preliminary Model for Decision-Making", CISR Report, Sloan 
School of Management, MIT, Cambridge, Massachusetts 

(28) Severino, Elizabeth F, "Database and Distributed Processing", Computer 

Decisions , Vol. 9, M^rch 1977, pp. 40-42. 

(29) Statland, Norman and Dor.ald Winski, "Distributed Information Systems: 

Their Effect on Your Company," Price Waterhcuse Review , Vol. 23, 
No. 1, 1978, pp. 54-63. 

(30) Woods, Lariy D., "Distributed Processing in Manufacturing," Datamation , 

Vol. 23, October 1977, pp. 60-63. 



u4